U.S GDP matches analysts’ forecast of 2.1% growth rate in the fourth quarter

The
Bureau of Economic Analysis revealed the fourth quarter to have seen a 2.1%
growth in the U.S economy. Amidst the U.S – China trade war that continued to
weigh on business investment, 2019 had previously recorded the slowest economic
growth in the U.S in three years.

As
per the report, at 2.1%, economic
growth in the United States remained unchanged in the fourth quarter. In a
previous estimate, economists had also expected the U.S GDP to hold steady at
2.1% in Q4. For the whole year, the bureau announced a 2.3% growth in the U.S
economy that marked 0.7% lower than 2018’s 2.9% growth. The Commerce Department
also highlighted on Thursday that in the first year (2017) of Trump presidency,
U.S economic growth was recorded at 2.4%.

The White House Had Anticipated The Quarterly GDP To Grow At A 3% Rate

Q4
reading, however, came significantly shy of the White House’s estimate.
Following the tax bill of 2017 that cut rates for individuals as well as
corporates, the government had anticipated a 3% economic growth in 2019 at the
very least.

According
to the experts, rising consumer spending in the final quarter of 2019 helped
improve the economy at a 1.8% pace versus the last quarter’s 3.2%. The U.S
economy is now valued at $21.7 trillion of which, 68% is attributed to the
consumers.

In
fiscal 2019, PCE climbed 2.6% versus 2018’s 3% reading. Real disposable income
in the fourth quarter was 1.5% higher versus a higher 2.9% in the previous
quarter. The rate of savings was noted at 7.7% in Q4 that didn’t budge
significantly as compared to the third quarter.

Eric
Winograd Of Alliance Bernstein Appreciated Economic Stability In The U.S

As
per the analysts, Thursday’s report suggested that the economic growth in the
United States may currently be
slow but it is also steady. Appreciating the economic stability, Alliance
Bernstein’s senior economist, Eric Winograd, commented that the economic growth
is unlikely to be disturbed in the U.S unless it is hit by a serious shock.

The
U.S advance GDP price index came out at 1.4% on Thursday versus the analysts’
estimate of 1.8%. The quarterly advance GDP price index was recorded at 1.8% in
the previous quarter.

The
economic data on Thursday failed to stir a major movement in the forex market.
One of the widely traded currency pairs, EUR/USD, rallied from around 1.1015 to
a daily high of 1.1038 after the release of the data. The U.S dollar index, on
the other hand, dropped from 97.80 to 97.63 on Thursday.